By Admin on Feb 4, 2010 in Other - Business & Finance
Joe S asked:
can someone help me out with this, its been so long since ive done it and havent got a clue… heres the transaction:
can someone help me out with this, its been so long since ive done it and havent got a clue… heres the transaction:
Amortization is calculated on the capital assets using the following methods and useful lives:
building, straight-line, 25 years, $15000 residual value
equipment, single declining-balance, 5 years, $2000 residual value
Patent, straight-line, 20 years, no residual value
heres the accounts:
Building – $105000
Building Accumulated Amortization – $10800
Equipment – $25000
Equipment Accumulated Amortization – $12200
Patent (net of $11250 accumulated amortization) – $ 63750
the accounts for the journal entries are amortization expense debit, accumulated amortization and patent credit, right? i just have no idea how to find these numbers…
Here are the required numbers:
Amortization expense:
Buildings ($105,000 – 15,000)/25 = $3,600
Equipment ($25,000-12,200) x 0.20 = $2,560
Patents Total cost $63,750 + 11,250 = $75,000
Amortization $75,000/20 = $3,750
rehman vohra | Feb 7, 2010 | Reply